Car Insurance: Should I let my friend drive my car?

car keysA common myth in the insurance industry is that the car insurance policy follows the driver, not the car.  In Wisconsin, it’s the opposite.  In the event of an accident, the car insurance follows the car or policyholder, not the driver.  Even if the other driver has insurance, with great liability limits and low deductibles, your company is primarily responsible for any damages that have occurred.  As defined in the Wisconsin insurance law, a policy provides coverage to the named insured, spouse, and other relatives living in the home as well as anyone to whom the named insured has given permission to operate the vehicle.  Key word, permission.

If you plan on lending someone your car, remember you’re also lending them your car insurance.  Take this into strong consideration before handing over your keys.  Here’s a scenario explaining how a claim would be handled in the event that you gave a friend permission to use your vehicle:

John gives his friend Andy permission to drive his vehicle to the grocery store.  John’s insurance policy coverage is primary on the vehicle, even though Andy is the person operating it and has his own insurance.  On the way to the grocery store, Andy rear ends another vehicle.  Andy is found at fault for this accident.  The accident is very severe and the damages done to the rear ended driver exhausts all of John’s liability insurance policy limits.  Andy’s policy then becomes secondary and provides the additional liability coverage needed to make the injured party whole again.

What if Andy doesn’t have insurance?

Consider the previous scenario where Andy rear ends another vehicle while driving John’s car, but this time, Andy doesn’t have insurance.  (Again, the accident is severe and all of John’s liability limits have been exhausted, now what?)  This time John is liable for ALL damages done by Andy because Andy doesn’t have insurance to cover the additional damages to the injured driver.  John would likely be sued for those additional damages, as the injured party has a right to be made whole again.

(This is why our agency recommends strong liability limits and additional umbrella coverage, see our previous post on umbrella policies to learn more.)

If you have any questions regarding your auto insurance policy, please contact Colonial Insurance Agency.  Our agents are happy to review your current coverage and explain any policy details!



**Review your personal policy details to be certain where coverage is applied.  Make sure to check with state laws regarding any liability coverage details and exclusions where available .  This information is not related to your specific policy, be sure to check with your specific agent or company for exact coverage definitions or exclusions. **